By Dan Catchpole Herald Writer
EVERETT — “What’s Bitcoin?” the woman asked, nodding her head at the “Bitcoin accepted” sign posted on the drive-through coffee stand.
The woman working the stand, Sheri Brisky, had a ready reply, one she’s repeated countless times since the sign went up earlier this month.
“It’s a digital currency,” she said, and then explained how Bitcoin combines decentralization, encryption and transparency to create a secure, reliable system for digitally capturing and conveying value.
Looking up from her Mini Cooper, the customer appeared a little lost.
“It’s really not as confusing as it sounds,” Brisky said.
In early July, Marathon Coffee became one of the first — and possibly the first — retail businesses in the area to take Bitcoin, a technology that from a user’s perspective works like digital money.
After quietly starting in 2009, it has grabbed headlines in recent years. Customers can use bitcoins to pay for goods and service from Overstock.com and the Sacramento Kings, among others. At least one college is taking tuition payment in bitcoins. A relief fund set up following the Oso mudslide took donations in bitcoins. They can be exchanged for just about every major currency.
Individuals can choose from a wide variety of ways to create digital wallets to store bitcoins. Transactions are often done using a smartphone and unique visual identifiers called QR codes. Unlike credit and debit cards, bitcoin transactions do not reveal any information about the consumer.
But all that information is pulled up every time you swipe a debit card at the grocery store or enter a credit card number into a website. Malicious hackers have exploited that weakness. For example, they stole a huge amount of personal financial information by infecting cash registers at Target stores with malicious software.
Advocates say Bitcoin will change how people conduct transactions great and small, from buying a cup of coffee to executing a will.
Skeptics have raised a raft of questions and criticisms, including Bitcoin’s legality and potential susceptibility to currency speculation.
It has attracted the attention of everyone from actor Ashton Kutcher, who last year invested in a Bitcoin-related company, to Nobel Prize-winning economist Paul Krugman, who last year called it “evil.”
For all that attention, Bitcoin is slowly making its way to main street and places like coffee stands in blue-collar Everett.
It was Marathon Coffee co-owner Jim Ruble’s idea to start taking bitcoins.
“He’s a geek,” Brisky, 51, said affectionately.
The couple make their home in Kirkland.
Ruble, 49, has a background in engineering and had been following Bitcoin from a distance for several years. He started paying much closer attention late last year, when the exchange value of a single bitcoin shot up to about $1,200. It has since come down; on Thursday afternoon, it was just over $600.
Despite all the buzz, he wasn’t convinced Bitcoin was viable until something happened in February that grabbed headlines around the world: Hackers stole bitcoins worth about $400 million at the time from the largest online exchange, Mt. Gox.
Some quickly said the heist highlighted the system’s problems, and it likely scared off many casual observers.
The exchange value of bitcoins fell against the dollar, but the market didn’t collapse. People continued using it.
“I thought, ‘This isn’t a show-stopper. Maybe there is something to this,’ ” Ruble said.
He now uses bitcoins for online transactions, and earlier this month, Marathon Coffee started accepting the currency.
When a customer uses a credit card or debit card, Marathon Coffee, like all merchants, has to pay fees and service charges.
“It adds up to hundreds of dollars a month,” he said.
But the processing costs for taking bitcoins are a small fraction of that, he said.
Unlike Bitcoin, those other payment systems were designed before the Internet, and so it costs more to make them work in the virtual world.
Marathon Coffee finally had its first customer paying with bitcoins last weekend. A Canadian traveler staying at a nearby hotel paid about 0.0067 of a bitcoin — equivalent to $4.25 at the time — for a white chocolate mocha.
Bitcoin doesn’t have to be used by everyone to succeed, said Jinyoung Lee Englund, head of communications and marketing for Bitcoin Foundation, a nonprofit advocacy group.
Right now, it is still in its infancy, but it is consistently gaining traction.
So, how will we know when it has moved from the periphery into the mainstream?
Maybe when reporters stop writing articles like this one, Englund said.
Ruble thinks that point is only five or 10 years away.
“I remember the first time I used an ATM; it seemed so foreign. You put in this plastic card and it spits out cash. Before, you had to go in and talk with a person. That’s where Bitcoin is now,” he said. “It took a few years, but nearly every retailer takes debit cards now.”
Dan Catchpole: 425-339-3454; firstname.lastname@example.org; Twitter: @dcatchpole.